Introduction to MIS

Chapter 1
Introduction
Outline
⚫ How can MIS help you in your job?
⚫ What is MIS?
⚫ Why is information technology important? Why do all business
majors need to study it?
⚫ What are e-commerce and e-business? Is e-business increasing or
decreasing?
⚫ Do you know what a manager does? Do you know what a
successful manager will do in the future?
⚫ How is business changing? What will managers need to know in the
future?
⚫ Does technology alone improve a business?
⚫ How do you break businesses into smaller pieces to analyze them?
⚫ Why are strategic decisions so difficult? How do you begin
searching for competitive advantage?
What is MIS?
⚫ Information
◦ Data that has been put into a meaningful and
useful context. Usually to help make a decision.

⚫ Management Information System

◦ A combination of computers and people that is
used to provide information to aid in making
decisions and managing a firm.

⚫ Information Technology (IT)

MIS Components

Hardware
Software

Backup
data
Restart job
Virus scan

People Data
Procedures
Why is MIS Important?
⚫ MIS affects all areas of business
◦ Manufacturing
◦ Accounting & Finance
◦ Human resources
◦ Marketing
◦ Top management
⚫ Performance evaluations—expectations
 Productivity Growth: Output per Worker

1. Managers need to use technology to increase productivity to be competitive.

2. With a 2.9% growth rate, in a decade, productivity increases 34%.
Companies can produce the same output with half the workers. Will you be
one of the workers replaced?
 Meaning Of Information Systems

⚫ An information system is an organized combination of

people, hardware, software, communications Networks
and data resources that collects, transforms, and
disseminates information in an organization.

7
Types Of Information System

8
MANAGEMENT INFORMATION SYSTEM(MIS)

⚫ The MIS is defined as a system based on the database of

the evolved for the purpose of providing information to
the people in the organization.

9
 ⚫ Management information systems are distinct from
regular information systems in that they are used to
analyze other information systems applied in operational
activities in the organization. MIS involve three primary
resources: technology, information, and people.
⚫ Management information systems are regarded to be a
subset of the overall internal controls procedures in a
business, which cover the application of people,
documents, technologies, and procedures used by
management accountants to solve business problems such
as costing a product, service or a business-wide strategy.

10
Role Of MIS

⚫ The role of MIS in an organization can be compared to the

role of heart in the body.

⚫ The information is the blood and MIS is the heart. In the

body the heart plays the role of supplying pure blood to all
the elements of the body including the brain.

⚫ The MIS plays exactly the same role in the organization.

⚫ The system ensures that an appropriate data is collected

from the various sources, processed, and sent further to all
the needy destinations.

11
⚫ The system is expected to fulfill the information needs of
an individual, a group of individuals, the management
functionaries: the managers and the top management.

⚫ The MIS satisfies the diverse needs through a variety of

systems such as Query Systems, Analysis Systems,
Modeling Systems and Decision Support Systems.

⚫ The MIS helps in Strategic Planning, Management

Control, Operational Control and Transaction Processing.

12
Characteristics of MIS
⚫ Management-oriented: The basic objective of MIS is
to provide information support to the management in
the organization for decision making.
⚫ Management directed: When MIS is
management-oriented, it should be directed by the
management because it is the management who tells
their needs and requirements more effectively than
anybody else.
⚫ Integrated: It means a comprehensive or complete view
of all the subsystems in the organization of a company.

13
 ⚫ Common data flows: The integration of different
subsystems will lead to a common data flow which will
further help in avoiding duplicacy and redundancy in data
collection, storage and processing.
⚫ Heavy planning-element: The preparation of MIS is not
a one or two day exercise. It usually takes 3 to 5 years and
sometimes a much longer period.
⚫ Subsystem concept: When a problem is seen in 2 sub
parts, then the better solution to the problem is possible.

14
⚫ Common database: This is the basic feature of MIS to
achieve the objective of using MIS in business
organizations.
⚫ Computerized: MIS can be used without a computer.
But the use of computers increases the effectiveness and
the efficiency of the system.
⚫ User friendly/Flexibility: An MIS should be flexible.
⚫ Information as a resource: Information is the major
ingredient of any MIS.

15
Features of MIS
⚫ Timeliness
⚫ Accuracy
⚫ Consistency
⚫ Completeness
⚫ Relevance

16
Components of MIS
1) Marketing Research System (MRS)
Marketing research can be seen as the systematic and
objective search for and analysis of data and information
relevant to the identification and solution of any problem in
the field of marketing.

17
2) Marketing Intelligence System (MIS)
The process of acquiring and analyzing information in
order to understand the market (both existing and
potential customers); to determine the current and future
needs and preferences, attitudes and behavior of the
market; and to assess changes in the business
environment that may affect the size and nature of the
market in the future.

18
3) Internal Record System (IRS)
Marketing managers rely on internal reports on orders,
sales, prices, costs, inventory levels, receivables,
payables, and so on. By analyzing this information, they
can spot important opportunities and problems.

19
4) Decision Support System(DSS)
A decision support system (DSS) is a computer-based
information system that supports business or
organizational decision-making activities. DSSs serve the
management, operations, and planning levels of an
organization and help to make decisions, which may be
rapidly changing and not easily specified in advance.

20
 Aim of Management Information
System

⚫ The main aim of MIS is to inform management and help

them make informed decisions about management and the
way the business is run.

21
Types Of MIS
⚫ Transaction processing systems: These systems
process a large volume of routine, recurring transactions.
⚫ Operations information systems: These systems gather
comprehensive data, organize it and summarize it in a
form that is useful for managers.
⚫ Decision support systems: These systems help mangers
with the necessary information to make intelligent
decisions.
⚫ Expert systems: They are meant to mimic humans in
making decisions in a specific field.

22
 Elements of MIS

1.Hardware
2.Software
3.Control
4.Databases and application programs
5.People
6.Telecommunications and Networks

23
 Outputs Of a MIS

⚫ Scheduled reports which are

produced periodically, or on a
Schedule (daily, weekly, monthly).

⚫ Key-indicator report which

summarizes the previous day’s
critical activities and also it is
typically available at the beginning
of each day.

24
⚫ Demand report which
gives certain information
at a manager’s request.

⚫ Exception report which

is automatically produced
when a situation is
unusual or requires
management action.

25
 Benefits of MIS

⚫ It improves personal efficiency.

⚫ It expedites problem solving(speed up
the progress of problems solving in an
organization).
⚫ It facilitates interpersonal
communication
⚫ It promotes learning or training.

⚫ It increases organizational control.

26
⚫It generates new evidence in support
of a decision.
⚫ It creates a competitive advantage
over competition.
⚫ It encourages exploration and
discovery on the part of the decision
maker.
⚫ It reveals new approaches to
thinking about the problem space.
⚫ It helps automate the Managerial
processes.

27
What are e-Commerce and e-Business?
⚫ Business-to-Consumer (B2C)
◦ Selling retail products to consumers
⚫ Business-to-Business (B2B)
◦ Selling at the wholesale level to other businesses
⚫ E-Business
◦ Using Internet technologies to conduct any level
of business
◦ E-Commerce
◦ Intranets
◦ Most areas of MIS
Retail E-Commerce Statistics

In 2010 EC was about 5 percent of total.

Remove autos and auto parts and EC is about 6 percent.
Notice the seasonal peak in the fourth quarter.
Notice the EC is growing faster than total retail sales.
http://www.census.gov/retail/index.html#ecommerce
Technology Excesses?
• You can buy a new
model item when it is
released or wait for the
price to drop.
• You can keep buying
new releases or
continue to use an “old”
model.
• Answers depend on
your needs, the
features offered, and
the reliability of the old
items.
• Plus the bling factor.
What do Managers do?
⚫ Traditional
◦ Organizing
◦ Planning
◦ Control
⚫ Mintzberg
◦ Interpersonal
◦ Informational
◦ Decisional
⚫ Luthans
◦ Traditional 50%
◦ Formal Communication 30%
◦ Networking 20%
 Meetings

Managers and professionals spend considerable time in meetings. Providing

support for teamwork and group decisions is an important issues in MIS.
 Making Decisions
⚫ Methodology v Ad Hoc Decisions
⚫ Decision Process
◦ Collect Data
◦ Identify Problems & Opportunities
◦ Make Choices
2 3
1
Traditional Management
CEO Condensed reports
Commands

VP VP
VP VP VP
Marketin Accounti
Finance HRM MIS
g ng
Analyze data

Layers of middle managers

Collect
data
Customers
Decentralization
Management Team
CEO
VP VP VP VP VP
Fin Mrkt Acct HRM MIS
Strategy

Marketin Accounti Corporate

Finance HRM
g ng Database
Team Team
Team Team &
Network

Sales Methodology/Rules
Franchise
Team

Customers
Business Trends
⚫ Changing business environment
◦ Specialization
◦ Management by Methodology and Franchises
◦ Mergers
◦ Decentralization and Small Business
◦ Temporary Workers
◦ Internationalization
◦ Service-Oriented Business
◦ Re-engineering
⚫ Need for faster responses and flexibility
Business Trends & Implications
⚫ Specialization
◦ Increased demand for technical skills
◦ Specialized MIS tools
◦ Increased communication
◦ Emphasis on Teamwork
⚫ Methodology & Franchises
◦ Reduction of middle management
◦ Increased data sharing
◦ Increased analysis by top management
◦ Computer support for rules
◦ Re-engineering
⚫ Mergers
◦ Larger companies
◦ Need for control and information
◦ Economies of scale
⚫ Decentralization & Small Business
◦ Communication needs
◦ Lower cost of management tasks
◦ Low maintenance technology
 Business Trend Summary
Business Trend Implications for Technology

Specialization 1.Increased demand for technical skills

2.Specialized MIS tools
3.Increased communication

Methodology & Franchises 1.Reduction of middle management

2.Increased data sharing
3.Increased analysis by top management
4.Computer support for rules
5.Re-engineering

Mergers 1.Four or five big firms dominate most industries

2.Need for communication
3.Strategic ties to customers and suppliers

Decentralization & Small 1.Communication needs

Business 2.Lower cost of management tasks
3.Low maintenance technology

Temporary Workers 1.Managing through rules

2.Finding and evaluating workers
3.Coordination and control
4.Personal advancement through technology
5.Security

Internationalization 1.Communication
2.Product design
3.System development and programming
4.Sales and marketing

Service Orientation 1.Management jobs are information jobs

2.Customer service requires better information
3.Speed
Business Trends & Implications
⚫ Temporary Workers
◦ Managing through rules
◦ Finding and evaluating workers
◦ Coordination and control
◦ Personal advancement through technology
◦ Security
⚫ Internationalization
◦ Communication
◦ Product design
◦ System development and programming
◦ Sales and marketing
⚫ Service Orientation
◦ Management jobs are information jobs
◦ Customer service requires better information
◦ Speed
Internationalization

http://www.bea.gov/national/nipaweb/Index.asp
International Web Browsers

http://www.internetworldstats.com/stats7.htm
Web Users (Counts)

Asia: 30 percent of population

North America: 75 percent

http://www.internetworldstats.com/stats.htm
US Employment Patterns

Categories and definitions have changed over time.

Management includes professional, sales, and administrative.
The key point is that most jobs are information-processing jobs.
But the numbers measure number of workers, not the value or sales.
http://www.bls.gov/webapps/legacy/cpsatab4.htm
 Changing Business Environment
⚫ US History: Farmer Laborer Management

Year Farm Mfg Mgt Service

1920 29 44% 22% 6%

%
1940 23 38 30 8
1960 9 36 43 12
1980 3 32 52 13
2000 1 16 66 17
2010 1 11 68 20
MIS Organization

S
EI
Strategic

ES P
ER
Mgt.

S
on
Tactical

an DS

l
cti

tro
Management

sa

on
sC
Tr
es
oc
Business Operations

Pr
Operations, Tactics,Strategy
 Decision Levels
Decision Description Example Type of Information
Level
Strategic Competitive advantage, New product that External events, rivals,
become a market leader. will change the sales, costs quality,
Long-term outlook. industry. trends.
Tactical Improving operations New tools to cut Expenses, schedules,
without restructuring the costs or improve sales, models,
company. efficiency. forecasts.
Operations Day-to-day actions to Scheduling Transactions,
keep the company employees, accounting, human
functioning. ordering supplies. resource management,
inventory.
Introduction to Strategy
⚫ Risk & Reward
⚫ Creativity
⚫ Porter’s External Agents
◦ Customers
◦ Suppliers
◦ Competitors
◦ Government
 Strategy/Porter
Threat of
New Entrants

Bargaining Power Rivalry Among Bargaining Power

of Suppliers Existing Competitors of Buyers

Threat of Substitute
Products or Services
Baxter/Strategy
Typical Supply Relationship

Hospital
American Hospital Supplier
Supply

Supply
Closets Warehouse

Supplier
Supply
storeroom

Supplier
Baxter/Strategy
AHS/Baxter Computer Link

Supplier
Hospital
American Hospital
Monitor
Supply Baxter
Usage data
Supply Closets Computer

Deliver Warehouse
Supplies as
needed
Supplier
Free space
Accurate usage data

Supplier
An Internet Approach for Hospital Supply
Daily Auction
Bid1
Bid2 Supplier
Hospital
Bid3 <<purchase
Baxter
Supply Closets
Internet
Supplier

Johnso
n

Winning bidder
delivers supplies
Supplier
Strategy/Organization
⚫ Strength ⚫ Weaknesses
◦ Source of strength ◦ Effect on company
◦ Value of strength ◦ Possible solutions
◦ How can it be developed? ◦ Cost of solution
◦ What could undermine it? ◦ Result and cost of leaving as-is
◦ Development costs (do nothing)
◦ Additional benefits
(opportunities)
Cloud Computing
⚫ As consumers and students, you are familiar with
Web-based services.
◦ E-commerce, sales
◦ News, entertainment
◦ Communications
◦ Social networks and interaction
⚫ Businesses can use the same approaches and run software
and data on Web servers with applications on laptops,
tablets, and cell phones to access this data.
◦ Cloud computing consists of running the main servers, data, and
business logic on Web-based servers in the Internet cloud.
◦ Each chapter explores impacts and implications for business of
moving more operations into a Web-based system.
Technology Toolbox: Choosing a Search Engine
General purpose search engines Consider using multiple
Google, Bing, Yahoo search engines because
Meta-searches across multiple engines some of them filter
Dogpile responses based on your
Encyclopedia prior queries.
Wikipedia.org
Dictionary
Wiktionary.org (or click the research button in IE)
Phone book
Switchboard, Superpages
Products
Mysimon, Cnet
Government data
CIA.gov (World Factbook)
Fedstats.gov (main data source)
SEC.gov (EDGAR corporate filings)
Math and Science and some Data
Wolframalpha
Other (and often better)
Your library databases
 Quick Quiz: Search Engines
Where would you begin your search to answer the following
questions?
1. Under the proposed IAU definition, which planetoid falls between
Mars and Jupiter?
2. By revenue, which was the largest company in the world in 2010?
3. Find the best price on a 512 GB SSD.
4. Which U.S. professional basketball team had the fewest wins in
the 2010-2011 season?
5. Which celebrities are still alive? Sophia Loren, Harman Killebrew,
Phyllis Diller, Nancy Reagan, I.M. Pei.
 Advanced Searches
Boolean searches: And/Or/Not
Phrases: “white knight”

“white knight” 126,000

“white knight” corporate 12,000
“white knight” corporate
–hackers –groups –Australia –resources 5,080
“white knight” corporate merger
–hackers –groups –resources 701
“white knight” corporate merger
–hackers –groups –resources –history –Australia 655

You can also search by date, domain (company), linked

pages, and even reading level (with Google).
 Wolfram Alpha (Mathematica)
http://www.wolframalpha.com/

Search:
derivative of 5*x^4 - 13*x^3

Other searches:
A date
A town
Two stocks
 Bing (Microsoft)
http://www.bing.com

Organizing the
results to help find
answers and
knowledge.

http://www.yippy.com
Was: http://www.clusty.com
(Vivisimo)
 Technology Toolbox: Government Data
Agency
Labor (BLS)
Census
Economic Analysis (BEA)
Transportation Statistics
Justice Statistics
Economic Research (Ag)
Health (CDC)
Securities and Exchange
(SEC)
http://www.fedstats.gov
Main Types of Data Site
Employment and prices www.bls.gov/data
Demographic and maps www.census.gov
Economic summaries www.bea.gov
Airline, rail, and road www.bts.gov
Crime and courts bjs.ojp.usdoj.gov
Food and farm economics www.ers.usda.gov
Health and Healthcare www.cdc.gov/nchs
Business filings www.sec.gov
(EDGAR)
 Google: Public Data (2009)
WolframAlpha
Search:
CA unemployment rate

Can use other

standard statistics
from government
databases,
including
demographics.
 Quick Quiz: Government Data
1. What was the U.S. monthly unemployment rate for
the last year?
2. What is the current population of the U.S.?
3. What was the value of the U.S. trade deficit for the
last year?
Cases: Fast Food Industry